If the blocks are still intact and have integrity there is no reason that they cannot be reused in another top. I'd pitch the fabrics that are falling apart perhaps taking a picture or saving a scrap. They will only continue to disintegrate and you will have to replace them shortly. Historically older quilts were repurposed as batting for the next quilt. Even though the under top appears to be in better shape it may be older and just protected from wear. Interesting story and I'd be interested in photos if you were able to share them.